The Transatlantic Trade and Investment Partnership aims at integrating the European Union and the United States the largest trade agreement in the world. The formal negotiations for this ambitious Treaty began in June 2013 The aim of this agreement is to eliminate or reduce barriers to trade in goods, services, and investment, in order to enhance compatibility of regulations and standards and also enhance business opportunities in both the US and the EU. And we are talking about a very special market: 60% of the global GDP and over 900 billion dollars. The hugest market all over the world.
The arguments are not only economical but also geopolitical, since the Pacific is displacing the Atlantic as economic center of gravity due to the increasing prominence of the “emerging” markets, the Treaty looks to facilitate trade and investments among the two richest regions of the world.
One of the main concerns is about the transparency of the negotiations. A more proactive disclosure of documents of TTIP and a greater transparency on the meetings held in connection with the settlement of Community officials with business organizations, lobbies or NGOs.
The deeper draft of these negotiations aims to overcome trade barriers beyond national boundaries that separate consumers on both sides of the Atlantic.
Although negotiations address a wide range of issues, negotiations on a comprehensive trade and investment agreement should aim to achieve ambitious outcomes in three broad areas: a) market access; b) regulatory issues and non-tariff barriers; and c) rules, principles, and new modes of cooperation to address shared global trade challenges and opportunities.
The High Level Working Group on Jobs and Growth recommends that the objective of such an agreement be to achieve a market access package that goes beyond what the United States and the EU have achieved in previous trade agreements. Second, a key shared objective should be to identify new ways to prevent non-tariff barriers from limiting the capacity of U.S. and EU firms to innovate and compete in global markets. According to HLWG, a key objective is to promote confidence in our respective conformity assessment bodies, and enhance cooperation on conformity assessment and standardization issues globally.
Farmer organizations and cooperatives have expressed their concern about changes in the current production and food security model which might occur following a free trade agreement with the US and the EU. Many wonder whether the EU will be forced to change legislation regarding genetically modified organisms (GMOs).
Part of European society have shown concern over the mechanism for investor-state dispute settlement (ISDS). The European Parliament (EP) has its red lines clearly set in this repect.
The full EP approved last week, after the vote was postponed a month ago, its recommendations to the European Commission (EC) for the negotiation of a free trade agreement with US (TTIP), by 436 votes to 241, with 32 abstentions. The resolution got the majority approval of EPP, Social Democrats (S & D) and liberals (ALDE) thanks to a compromise on the most controversial issue to the EP. the investor-state disputes.
The MEPs demanded to ensure “non-discriminatory and predictable procedural requirements ensuring equal access for EU and US companies, especially SMEs, where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism”, the parliament’s new recommendations say.
To settle trade-related investor-state disputes, a new justice system, run by publicly-appointed judges and subject to scrutiny and transparency rules, should replace private arbitration under the Investor-State Dispute Settlement system, according to the press release.
Beyond the arbitration system, it highlights the red line set by the European Parliament that existing levels of protection are maintained to European workers. The resolution claimed that the United States commit to respect labor laws keeping with the International Labour Organisation (ILO) Core Conventions or take the risk of the EP veto when they vote once the agreement has been finally negotiated.
In the debate on TTIP carried out by MEP’s, several voices raised against this controversial transatlantic agreement. Italian MEP Eleonora Forenza (Confederal Group of the European United Left – Nordic Green Left) stated that TTIP favored investor’s interest to the detriment of the citizen’s ones. Much more critical was the Greek MEP Stelious Kouloglou (Confederal Group of the European United Left – Nordic Green Left), who claimed that the very concept of democracy was in serious danger if this agreement came into effect.
Notwithstanding, positive speeches could be heard in the seat of European Parliament. Czech MEP Pavel Telicka, of the Group of the Alliance of Liberals and Democrats for Europe, reminded that there had not been similar agreement that can be compared to TTIP, so that each comment against TTIP was “mere speculation that drove into populism”. Spanish MEP Inmaculada Rodriguez Pineiro (Socialist and Democrats) supported this Treaty since it benefits EU citizens by creating new employment opportunities at the same time that fosters Market Economy. In short, the discussions were held in a divided and polarized Parliament, whose members have had the last word on this crucial issue for the future of EU.
The drivers of TTIP insist on presenting this treaty as an instrument for growth and job creation without additional public spending and borrowing.
According to independent report of the Centre for Economic Policy Research, real income estimations fluctuate greatly between two Ecorys studies. In the short run, (EU-26 excluding The Netherlands) benefits vary from eur 15 billion to eur 44 billion. In the long run EU 26 BENEFITS range from 35 to 117 billion, whereas US benefits vary from Eur 18 to eur 41 billion.
Long- term impacts on total GDP in the ‘reference scenario’ will be modest for both economies (0.3%) with uneven effects on the different sectors. Results are slightly more conservative with respect to the Commission Exercise in the most ambitious scenario (0.5% and 0.4%), said the report.
In fact, the existing business relationship between the United States and the European Union is the largest in the world, with a daily flow of exchanges estimated at 2,000 million euros.
A transatlantic trade agreement, once drafted by European and US negotiators still need to be endorsed by the European Parliament and the Council of the EU before entering into force. US and EU are expected to conclude TTIP negotiations before the end of the Obama Administration, at the end of next year.